EQT Holdings AB, the Swedish private-equity investor, raised 845 million euros ($1.17 billion) to invest in the debt of companies under financial pressure.
EQT Credit II will focus on stressed and distressed companies in northern Europe, according to a statement from Stockholm-based EQT, which is part-owned by investment company Investor AB. This will include businesses “facing challenges created by excess leverage or the need for additional capital.”
Distressed debt investors, which buy heavily-discounted borrowings or provide financing to struggling companies, scent opportunities as Europe’s economy emerges from recession. Ten speculative-grade companies in the region defaulted on 8.7 billion euros of obligations in the second quarter of the year, Standard & Poor’s said in a Sept. 9 report.
“We see opportunities for institutional investors in the credit market in Europe,” Andrew Konopelski, a London-based partner at EQT, said in a telephone interview. “Typically we are looking at illiquid mid-market situations and stressed refinancings where there’s a need for new capital.”
EQT’s fund raised more than its 700 million-euro target, with the majority of commitments coming from pension funds and insurers, according to the statement. Investors backing the fund included the Finnish State Pension Fund, Lancashire County Pension Fund and Talanx Asset Management.
EQT has raised 15 funds and was set up in 1994 by Investor AB, the firm controlled by the Wallenberg family, AEA Investors and SEB AB, according to a statement on its website. Josef Ackermann, former chief executive officer of Deutsche Bank AG, and Marcus Wallenberg, SEB’s non-executive chairman, were among five people EQT appointed to a new board of directors earlier this year.